Exploring Country-Of-Origin Perceptions By Multidimensional Scaling

ABSTRACT - The authors use multidimensional scaling techniques to study perceptions of country-of-origin. This technique has not typically been used to study the country-of-origin phenomenon. Samples from three different countries assessed similarities of products from five countries. Single-dimension solutions were derived. In addition, anchoring effects appeared in the results from all sample groups.

Citation:

Gerald Albaum, Ruiming Liu, and Linda Golden (1993) ,"Exploring Country-Of-Origin Perceptions By Multidimensional Scaling", in E - European Advances in Consumer Research Volume 1, eds. W. Fred Van Raaij and Gary J. Bamossy, Provo, UT : Association for Consumer Research, Pages: 183-190.

European Advances in Consumer Research Volume 1, 1993      Pages 183-190

EXPLORING COUNTRY-OF-ORIGIN PERCEPTIONS BY MULTIDIMENSIONAL SCALING

Gerald Albaum, University of Oregon, U.S.A.

Ruiming Liu, University of Oregon, U.S.A.

Linda Golden, University of Texas at Austin, U.S.A.

[The authors thank Frank Carmone, Florida International University for his comments on an earlier draft of this paper.]

ABSTRACT -

The authors use multidimensional scaling techniques to study perceptions of country-of-origin. This technique has not typically been used to study the country-of-origin phenomenon. Samples from three different countries assessed similarities of products from five countries. Single-dimension solutions were derived. In addition, anchoring effects appeared in the results from all sample groups.

INTRODUCTION

Since the 1960s, an extensive amount of research in international marketing has been involved in studying issues relative to country-of-origin. This research has been reported in the reviews by Bilkey and Nes (1982), Yaprak (1987) and Hong and Wyer (1989). In fact, it was suggested (Dichter 1963) that the concept of "made in" (i.e., country-of-origin) be recognized as an additional element of the marketing mix since the country-of-origin may have an overwhelming impact on the acceptance of imported products. Schooler and Wildt (1968) and Nagashima (1970, 1977) found that perceptions of products varied according to the country-of-origin based on preconceptions regarding attitudes towards the people of the country, and its perceived cultural similarity (Lillis and Narayana 1974). Some people even think that country image (i.e., country-of-origin) can be defined as consumers' general perceptions of quality for products made in a given country (Bilkey and Nes 1982; Han 1989).

However, there still are many ambiguities in this area. One of the reasons for the ambiguity may be the complexity of the country-of-origin issue (Papadopoulis, Heslop, Graby and Avlonitis 1987).

On more practical grounds, a question can be raised about what is a product's country of origin (Reich 1991; Business Week 1991). If a product is financed in Japan, designed in Italy, and assembled in the United States, Mexico and France using components invented in the United States and fabricated in Japan what is the country of origin? Global (multinational) companies often market products that have such a background. Moreover, in the expanding global economy, what's traded between nations is less often finished goods than specialized research, design, fabrication, management, marketing, advertising, consulting, financial and legal services, as well as components and materials (Reich 1991). Regardless of fact, products still are perceived to have a country of origin, and it is these perceptions that can lead to bias.

Other reasons for the complexity of the country-of-origin issue include the limitations and/or the simplicity of the analytic tools that have abeen used. For instance, conclusions such as "there is a significant difference between the perceptions by A and B" tell nothing about the content of the perception itself, and tell nothing about what the perception is composed of. Or what are the main components which determine the perception? Furthermore, do people from different countries put the same weights on each element of the perception? If not, which country's consumers pay more attention to which component? These questions are complex, but by means of multidimensional scaling (MDS) techniques the complexity may be reduced. MDS is particularly well suited (and originally developed) for measuring human perceptions (Green, Tull and Albaum 1988). In the academic area, a large number of studies reported in sources such as the Journal of Marketing Research and the Journal of Marketing in the 1970s and 1980s used these techniques. In marketing practice, Bateson and Greyser (1982) reported extensive relevant applications of 13 techniques of MDS. Almost 70 percent of the company researchers surveyed had used MDS, with two-thirds of these users finding the techniques relevant to their problems. This finding represented a significant increase in the use of the techniques from that reported for 1975, where only 16 percent of companies reported using multidimensional scaling (Greenberg, Goldstucker and Bellenger 1977). The primary users were market research and consulting firms, and consumer goods companies.

Unfortunately, researchers who have studied "country-of-origin" tend to use techniques other than MDS. The purpose of the present paper is to decompose overall consumer perception rankings to generate perceptual maps (via MDS) in order to examine some of the questions raised above. Samples from three different countries (USA, New Zealand, and Denmark) are used.

METHODOLOGY

The study was designed using general survey research techniques. The measurement instrument was administered personally and respondents provided data by self-report. To make cross-national comparisons possible, the surveys were conducted in three countriesCthe United States (USA), New Zealand and DenmarkCselected to represent divergent areas in the world (i.e., North America, Australasia, and Europe). Thus, external validity should be enhanced and the study should allow for assessing, at least provisionally, any emic/etic (i.e., culture-bound/culture-free) properties that might exist regarding country-of-origin perceptions and the application of MDS techniques.

A simple questionnaire was used for data collection. The MDS procedures to be used, KYST and INDSCAL, require assessment of similarities. Respondents were asked to assess the product similarity for five countries by rank ordering the 10 pairs of countries generated by the five countries. The countries judged were as follows:

USA Sample: USA, Japan, Israel, Great Britain, West Germany

New Zealand Sample: USA, Japan, New Zealand, Great Britain, West Germany

Denmark Sample: USA, Japan, Denmark, Great Britain, West Germany

The specific countries picked include four that have been widely studied in the literatureCUSA, Japan, Great Britain, and West Germany. The number of countries was kept small to minimize respondent cognitive efforts. Since the study is exploratory it was felt necessary to allow each respondent to devote the time necessary to make judgments. The questionnaires were presented to the US and New Zealand sample groups in English, and to the Denmark sample group in Danish. A back-translation procedure was used to develop the Danish version (Sinaiko and Brislin 1973). The question asked of the US sample is shown in Figure 1.

FIGURE 1

ASSESSING PRODUCT SIMILARITIES - USA SAMPLE

Respondents were students enrolled in regular university classes in business topics at a single university in each country. In the United States and New Zealand, undergraduate students provided the needed information, whereas in Denmark, students were full-time employed persons enrolled in a post-graduate program leading to a degree that falls between an undergraduate and a Master's degree. The sample sizes were:

United States     114

New Zealand      67

Denmark             57

Often when students are used as survey respondents the surrogate question arises. This is not a problem since the study is primarily one of methodology application and there is no reason to believe students behave relatively differently than other population groups. Obviously, the substantive issue of absolute perceptual positioning cannot be generalized beyond students, although the Danish sample could be viewed as "normal consumers." Since nonprobability sampling was used it is difficult to generalize beyond the samples themselves.

RESULTS

Aggregate responses are presented in Figures 2 and 3. Because only five countries were examined, the dimensionality of a solution is limited to one-dimension. One heuristic regarding dimensionality is that the number of objects should be at least four times the number of dimensions to be derived (Kruskal and Wish 1978, p. 52). Another heuristic is that the number of input measures (similarity judgments) should exceed the number of output points (i.e., in two-dimensions each stimulus object has a plot of two points). Since the present study had 10 input measures a two-dimensional solution would plot the five countries in 10-points. A major reason why there is concern for the relationship between number of objects and dimensionality is that the interpretation of the goodness-of-fit measure stress may be affected (Kruskal and Wish 1978, p. 52).

A one-dimension solution will provide a composite general perception of product similarity based on origin. Results from non-MDS studies seem to indicate that overall perception has two major componentsCproduct impression and psychic difference. Product impression (or product dimension-specific) can be expressed by product quality, product familiarity, product reliability and product technical advance, etc., while psychic difference can be described by social value, lifestyle, language, economic development, political system, and geographic location, etc. Psychic difference is related to the concept of psychological proximity of countries (Carlson 1975). Countries that are psychologically close have a similar culture, are at a more similar level of economic development, and share other background aspects of history and present-day phenomena more than countries that are not psychologically close. There may still be differences between countries that are psychologically close as the concept is a relative one. Other possible interpretations of dimensions, or additional dimensions themselves, would include geographic location, language itself, and economic development.

One-Dimension Configurations

Figure 2A is a one-dimension configuration of Danish consumers' products perceptions. Using the KYST procedure this solution had a stress of 0.0625, which indicates a reasonably good fit. As mentioned earlier, the single dimension represents a composite general perception of product similarity. Examining this general perception, we see that Danish respondents think that their country's products are more close to those from Great Britain and West Germany, and are the most different from Japanese products. The order along the dimension (4,3,5,1,2) would suggest that Danish respondents place more relative importance on psychic difference than on product impression.

FIGURE 2

ONE-DIMENSION SOLUTION USING KYST

Figure 2B is the one-dimension configuration of USA respondents' products perceptions. Stress is 0.0032, indicating a very good fit. With the exception of Israel, USA respondents view products from the countries examined as being about the same. This would suggest that the general perception is mainly influenced by the product impression component, although it is possible that this finding reflects an economic development dimension.

Figure 2C is the one-dimension configuration of New Zealand respondents' products perceptions. Stress is 0.3657, which means that the configuration fit the sample data very poorly. Unlike the other sample groups, New Zealand respondents view products from their own country at one end of the composite dimension, almost as an anchor. The closest country is Japan while the country farthest away perceptually is Great Britain. This would suggest that product impression rather than psychic difference is the dominant consideration for the composite dimension. However, psychic difference cannot be ruled out as Great Britain's joining the European Community changed trading relations between New Zealand and Great Britain. Present-day events, therefore, may be overpowering history and background. Other interpretations of the positioning of the five countries would include geographic distance from New Zealand, and importance as a trading partner.

Deleting One's Own Country from Analysis

When asking respondents to judge similarities among a set of objects, there may be an anchoring effect when one's favorite brand, most visited retail store, or in the case of the present study one's own country is included in the set. That is, people may judge other countries on the basis of how they relate to their own country, and this anchoring may lead to a perceptual bias. In order to explore the anchoring phenomenon, judgments involving a respondent's own country were deleted from analysis. The resulting six pairs of countries were reranked and were analyzed by the KYST procedure. The resulting one-dimension configurations are shown in Figures 3A, 3B, and 3C. Stress is 0.000 for the Denmark and United States samples and 0.219 for the New Zealand sample.

Our interest is for the relationship between the four countries both when the anchor (home) country is included and when it is not included in data collected. Perusal of Figures 2 and 3 would indicate that relatively there is little change among the countries along the single dimension. It will be noted, however, that the coordinates shown in Figure 3A seem to be rotated from those shown in Figure 2A. This does not create any problems as rotation of the configuration is permissable because the configuration is based on distances between the points, and these distances do not change when the configuration is rotated (Kruskal and Wish 1978, pp. 34-5). In a typical MDS application such as that reported in this paper, there is no such thing as a correct rotational position for the configuration. Thus, solutions to ordinary MDS are always subject to rotation. Because the configuration can be freely rotated the coordinate axes have no special significance, and have no special meaning than lines in any other direction.

Although relative distances do not seem to be affected by the inclusion of an anchor object, absolute distances do. The distances between each pair of countries under conditions with and without inclusion of home country are shown in Table 1. For the Denmark sample major changes in distance appeared for all pairs other than USA/Great Britain and Japan/West Germany. Similarly, for the United States sample large changes occurred for pairs other than Japan/Israel and Great Britain/West Germany. Finally, there were changes in the New Zealand sample for all pairs except USA/West Germany and Japan/West Germany. There are no patterns in the direction of changes within as well as among the sample groups.

Configuration from the Three Samples by INDSCAL

From above discussion, it is implied that respondents from different countries may put different weights on the overall dimension of country-of-origin perception, which are derived from the three samples separately, and not from a single perceptual space. If all the three samples can be put into one perceptual map, we can not only check whether or not, under the same coordinate space, the above differences still exist, but also tell how they differ specifically. INDSCAL is a program designed for the analysis of individual differences of two or more subjects (countries in our case), and identifies weights that each subject (country) uses to evaluate the stimuli. Here the stimuli are identified in terms of a single underlying dimension that is common to all subjects (Green, Carmone and Smith 1989).

In order to have the same stimuli, Denmark is deleted from the Danish sample, Israel from the USA sample, and New Zealand from the New Zealand sample. The remaining four countries from all the three samplesCUSA, Japan, Great Britain, and West GermanyCare input into the INDSCAL program. The weights for each sample group (across all four countries) are:

Denmark          .898

United States    .797

New Zealand    .890

It is clear that there is not much difference among the respondent groups in how they view all countries together in perceptual space. There are differences, however, in how each country is viewed by the sample groups. The average weights are:

United States     -.239

Japan                 -.670

Great Britain       .655

West Germany   .254

Differences between countries range from .40 for Great Britain/ West Germany to 1.32 for Japan/Great Britain.

CONCLUSIONS

This study provides potentially important implications for country-of-origin perception in product evaluation. First, people from different countries have different perceptions about products made in different countries. Thus, bias about country-of-origin tends to be culture/nation-specific (i.e., an emic).

The data support strongly the possibility of a possible anchoring effect when one's own country is included in a study. Since studies often are done to see how people view other countries in relation to one's own country, there is not much that can be done about this. However, if one's own country is not relevant to the analysis then this study suggests it should not be included.

A practical implication for international marketers is that they must be aware that marketing strategy for country-of-origin effects may differ from country to country. For instance, for the United States market the advertising or promotion strategy should more stress product impression; in the Danish market, the strategy probably should stress more psychic difference; and for New Zealand equal emphasis may suffice.

Due to budget and other considerations several limitations of this study should be noted. First, an important area of concern for researchers is the question of treating imported products in general based on country-of-origin versus specific product classes such as apparel, electronics, or automotive products (Kaynak and Cavusgil 1983; Lumpkin and Crawford 1985), and consumers versus industrial users. The study reported in this paper is for products in general. Second, due to the small number of stimuli used the analysis was limited to a one-dimension solution. For meaningful and useful interpretations of perception at least two dimensions are desirable. This means that at least six stimuli are needed. More stimuli also improve reliability. This would provide better guidance for marketing strategy development and implementation. Third, the findings from MDS are more descriptive and more idea-generated. To be more conclusive, other statistical techniques may be needed to test hypotheses. Finally, some may be concerned about use of student samples (Reierson 1966; Morello 1984). Although students are not expected to behave differently than other population groups in methodological studies similar to that reported here, broad samples covering different population segments would enhance external validity.

An interesting phenomenon that emerges from this exploratory study is that of anchoring due to inclusion of own country. While the results tend to suggest such a phenomenon exists, these data hardly are conclusive. Studies designed solely to assess the effects of anchoring are needed before any definitive conclusions can be reached.

FIGURE 3

ONE-DIMENSION CONFIGURATION WITHOUT HOME COUNTR

TABLE 1

DISTANCES BETWEEN COUNTRIES IN ONE-DIMENSION PERCEPTUAL SPACE

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